Aussie casinos juggle pandemic limits as Blackstone eyes struggling Crown


Australian casinos continue to frantically revise their pandemic operating conditions, while the embattled Crown Resorts is once again the subject of takeover talk.

This weekend, casino operator SkyCity Entertainment Group announced that its Skycity Adelaide property would reopen Sunday (22) on a limited basis following the South Australian government lifting certain restrictions imposed last week due to a new COVID-19 cluster in Adelaide (sparked by a pizza worker’s lies to local officials).

For the time being, SkyCity Adelaide is restricted to the company’s Premier Rewards membership tiers and only 100 members will be allowed onto the gaming floor at any one time. The property is also imposing the standard physical distancing measures, including limits on the number of gaming machines in operation and the number of people allowed at each gaming table.

Meanwhile, next door in the state of Victoria, Crown Melbourne announced that new Restricted Activity Directions issued by state officials will cap the property’s total capacity at 1,000 patrons, with each indoor space limited to 150 patrons or one person per four square meters, whichever is less.

But while every other gaming machine will remain switched off, Crown Melbourne’s table games will be allowed to recommence operations under enhanced hygiene protocols and under the watchful eye of a ‘COVID marshall.’ The new rules will take effect on Wednesday (25) and the property expects its Metropol hotel will open on December 1.

In other Crown news, speculation is mounting that private equity giants Blackstone Group could swallow the Aussie casino operator whole as a means of preserving Crown’s New South Wales (NSW) gaming license.   

The ongoing inquiry into Crown’s regulatory failings at its Melbourne and Perth casinos resulted in NSW temporarily preventing gaming at Crown Sydney, which was scheduled to open on December 14. Crown is begging NSW for a ‘working test’ of gaming at Crown Sydney under strict supervision but the company has few friends left at the state government level following weeks of embarrassing revelations regarding anti-money laundering compliance.  

Blackstone acquired a 10% stake in the casino operator this spring following the failed attempt by Crown’s largest shareholder James Packer to unload 20% of the company to his former joint venture partner Melco Resorts & Entertainment. Last month, Blackstone reportedly sought permission from the NSW gaming regulator to boost its stake in Crown.

The growing sentiment is that Crown will have to undergo some kind of wholesale purge of ownership/executives/directors in order for NSW to approve gaming at Crown Sydney, and Reuters speculated Sunday that Blackstone may well fit that bill. A deal now would come at great cost to Packer, who has seen his 36% stake in Crown sharply devalued in recent weeks as the company’s share price plunged with each damaging revelation.

Moody’s Investors Service added to Crown’s woes by downgrading the company’s credit rating one notch to Baa3, just one step above junk status, citing “an increasing likelihood of major downside implications from the escalating regulatory investigations Crown is facing,” not only in NSW but in Victoria and at the federal level.   

Packer’s stake will be worth even less should the NSW inquiry’s final report – which is due in February – recommend the outright revocation of Crown Sydney’s gaming license. Even the best case scenario may see strict limits imposed on the property’s gaming operations, meaning Packer must decide quickly how to gamble his stake on a highly uncertain outcome.